Ted Grant

Slump this year?

A study of the economic factors indicates that [the] American and world
economy is heading for a new disastrous slump. All the evidence indicates that
the cycle of capitalism is approaching its inevitable denouement. Increased
production of machinery, heavy industry and light industry; the increased
investment in the last period; arms production; the extension of credit; the
increased extent of hire purchase and of mortgages on houses; all are reaching
saturation point.

The inevitable consequences of production for profit and the domination
of the market over the productive process, are reaching the limits set by
capitalism. For example, nearly a third of productive capacity in America is
not being used.

After the horrors of the war and the destruction involved in it, a
market was created for capitalism, which stimulated the development of
capitalist production. The industrialisation of backward countries and the
increase in exports of capital goods and engineering products from all
capitalist countries gave a further fillip to the expansion of the market. At
the same time, the existence of the market resulted in the expansion of new
techniques and productive processes, which in turn reacted to stimulate the
boom. Where in the main countries of capitalism ten percent of the national
income was devoted to the unproductive expenditure on armaments, this in turn
assisted the process of the boom and ensured in these capitalist countries the
continuance of “full employment.”

Working in the same direction was the fear of American capitalism of the
collapse of the entire system under the indignation of the masses of America
and Europe at the miseries inflicted by the system. This caused the Americans
to give massive aid in the various schemes associated with the names of
Marshall, Truman and their ilk.

Now, however, this period is drawing to a close. The symptoms of
economic collapse are very similar to those which preceded the great depression
from the end of 1929 to 1933.

There has been a parallel collapse on Wall Street of stock market share
prices, a fall in the prices of primary products—raw materials and food—which
will mean a steep fall in the income of the undeveloped areas of the world, the
production of consumer goods is reaching saturation point and business
investment (in new factories and machinery) is dropping in Britain, America and
the main capitalist countries. The rate of profit, due to the increased
investment in capital goods and the fact that the amount of surplus extracted
from the workers has not increased to the same extent, has fallen.

Poverty amid plenty

All these factors show that the limits of the market are being reached
under capitalism and that it will not pay the capitalists to invest further, in
Britain or America, in new capital equipment—machinery, factories, buildings
and so on. This in turn prepares the way for the collapse of the entire market,
because the system is based on the need for the capitalist to invest the
surplus extracted from the workers in new capital ventures. This means the over-production, from a capitalist point of
view, of both consumer and capital goods. Such is the “normal” paradox of
capitalism: idle factories and idle workers, unused capacity side by side with
the hunger of the working class and the peoples throughout the world.

The precarious prosperity of the last period has been due, so far as the
working class is concerned, to over-time, bonuses, and the extra income brought
home to the family by working wives. The golden chains of capitalism have been
loosened to their utmost extent. Now, after the price of war, comes the cruel
reckoning for this temporary alleviation of the pains of capitalism. The chains
will crash onto the backs of the workers, and big business will demand its
pound of flesh. After the “sacrifices” to restore production will come the
frantic appeals of capitalists of all nations to their wage-slaves to make
further sacrifices in order to compete in a frenzied scramble for markets.

Gaitskell has blandly prophesised a slump… and that’s all! If the Labour
and trade union leadership were to be worthy of their role as leaders of the
working class, they would be preparing the working class for the struggles that
lie ahead. They would have a plan drawn up by the National Council of Labour to
meet the slump. They would explain that all capitalist measures could only be
at the expense of the working class and, even if successful, could only prepare
the way, at a new stage, for an even worse slump.

Tinkering is useless. We have the warning of the last slump, where the
Labour leadership of Macdonald tried to operate on a capitalist basis and
headed the labour movement for disaster.

Right now, Labour must prepare a campaign for an election on a platform
of measures to meet the slump through an Emergency Powers Act. This would mean
a plan of production, and not the anarchy of private ownership and profit. As a
first step, the immediate nationalisation of all banks and insurance and of
major industry—steel, engineering, chemicals, textiles, shipping, building. The
working class must be mobilised to struggle for this programme under the slogan
of workers’ control of industry—of the factors that govern their existence.

Only such a programme, together with an international socialist appeal
to the workers of Europe, America and the colonial world to follow their
example and democratically control their own fate, can save the workers from
unemployment, wage cuts, a fall in the standard of living and the other
miseries they suffered in the last great crisis.